By Lia Avagyan
The Armenian government has secured a 12.5% stake in the Amulsar Gold Mine following the signing of an agreement between the Ministry of Economy and Lydian Armenia, the company that operates the mine. This development marks a significant milestone in the long-disputed mining project – on the one hand, it promises economic benefits, and on the other hand, it reignites mounting environmental concerns.
On Friday, Economy Minister Gevorg Papoyan emphasized the project’s economic potential at the signing ceremony, calling it a “megaproject” that will create over 1,000 jobs, contribute substantial tax revenues, and drive local community development.
“We believe in the success of this project,” he stated, asserting that all risks and concerns had been addressed through a thorough review.
Lydian Armenia CEO Hayk Aloyan announced that construction on the mine will begin in the next three months, with full-scale operations slated for the fourth quarter of 2025.
Finance Minister Vahe Hovhannisyan revealed earlier that Lydian Armenia had asked Yerevan for a state guarantee for a loan to support the mine’s operations. Observers suggest that transferring a 12.5% stake to the government may be tied to this state guarantee.
The Amulsar Gold Mine, located near the spa town of Jermuk, has been a focal point of contention since 2014 when the Armenian government granted operational rights to Lydian Armenia (then known as Geoteam). The project has faced fierce resistance from environmental activists and residents, who argue that the mine’s operations—particularly the use of cyanide in gold extraction—pose a serious threat to Armenia’s water systems, including Lake Sevan, the country’s largest freshwater reservoir.
Protests against the mine intensified after Armenia’s 2018 “Velvet Revolution,” with activists blocking access roads and effectively halting operations. Subsequent criminal investigations into the project were dropped in 2021, but questions about its environmental and social impact linger.
Lydian Armenia estimates that the Amulsar mine contains 70 metric tons of gold and plans to extract it over 25 years, generating annual tax revenues of $75–100 million. However, a CivilNet investigation revealed that a $150 million financing deal with the Eurasian Development Bank had fallen through, delaying the signing of the government’s 12.5% stake agreement multiple times. Economy Minister Papoyan declined to comment on why the bank’s loan was not approved.
Environmental advocates remain deeply concerned as the government touts the Amulsar Gold Mine as a vital driver of Armenia’s economic recovery. They argue that the mine’s operations risk irreparable damage to Jermuk’s status as a renowned spa destination and pose a grave threat to critical water systems, including those feeding into Lake Sevan, Armenia’s largest freshwater reservoir.
The government’s acquisition of a stake in the project marks a significant shift but also raises questions about whether the promised economic gains can be achieved without incurring substantial ecological harm.
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